Version: current

Layer 2 Concepts

The Layer 2 network allows the management of digital assets where transactions are processed through the Qredo blockchain with various nodes and services working together.

The Qredo blockchain records transactions that happen for these events:

  • A new user joins Qredo.
  • Cryptoassets are deposited to an account.
  • Cryptoassets are transferred from one Qredo user to another.
  • Cryptoassets are withdrawn from the Qredo Network.

Users interact with the Qredo Network using the Qredo app (see Qredo App Overview). When you have installed the app, you can invite users to be a trusted party from within the Qredo Network, or from outside of Qredo via LinkedIn, Telegram or WhatsApp.

A developer user can use the Qredo Network through the Partner API.

Qredo currently supports Bitcoin and Ether. Future versions will include support for XRP, USDC coin, and other cryptoassets.

Digital Signatures#

A transaction contains encrypted messages between nodes with one or more signatures in BLS format. When a user signs up for the Qredo Network, their own signature is added to the Qredo blockchain in the form of an IDDoc. Transactions, in the case of transfers and withdrawals, are written to the Qredo blockchain with the aggregated digital signatures of the participants that sign a transaction.

Recording the aggregation of signatures on the Qredo blockchain makes the blockchain serve as a consensus-driven immutable record of asset ownership. A transaction cannot be written to the Qredo blockchain without the aggregated signatures.

Consensus Rules#

A transaction requires various signatures from these participants that meet rules and conditions. These include:

  • The principal who decides on the custodian, custodian groups, and thresholds. They can also be the trade initiator where they provide a signature when the cryptoasset is transferred to a counterparty recipient, added, or withdrawn from the Qredo Network.
  • The counterparty who receives funds from the principal in a transfer.
  • The custodian who approves or rejects a transaction. When they approve, a signature is provided for the transaction. The custodian is part of a custodian group created by the principal and is linked to the fund of that transaction. Depending on the threshold, one or more custodians in the group need to provide their signatures.
  • The maker takes the role of the trade initiator in an atomic swap transaction and has his/her custodians.
  • The taker has the role of the counterparty in an atomic swap transaction and has his/her custodians.


For a transaction to be approved and written to the Qredo blockchain, the threshold determines how many custodian signatures are needed within a custodian group. For example, for a threshold of 2/3, at least 2 out of 3 signatures are needed for a transaction to be written to the blockchain. A higher threshold level, e.g. containing a ratio of 3/3, needs more custodian signatures for a transaction to take place. A lower threshold, e.g. containing a ratio of 1/3, needs fewer signatures for a transaction to take place.

Transfer Policies#

Transfer policies determine the type of transaction that a custodian can sign. These include atomic swap, transfer, and withdrawal policies. Custodians can be part of a group that allows, for example, signatures for a withdrawal policy.

Qredo Wallet#

Qredo wallet enables the management of cryptoassets on the Qredo Network. A wallet links to an external address and captures deposits into that address as funds it controls on the Qredo blockchain. A wallet is created when cryptoassets first added to the Qredo Network for deposits. Addresses need to be created for the cryptoassets going out.

Qredo Blockchain#

The Qredo blockchain consists of blocks of data that are joined together to create a chain. These blocks of data are assets that represent different Qredo app user actions and network configuration data that must be kept secure.

Assets comprise of:

  • IDDocs
  • wallet transfers
  • Settlement UTXOs
  • Settlements 
  • MPC key lists)

Assets, when specifically referred to for the Qredo blockchain, are different from digital assets that are described in the context of trading and finance.

Qredo blockchain software components are built using Tendermint, which delivers security and the ability to process a large number of transactions. Blockchain networks built using Tendermint are secured through Proof-of-Stake instead of Proof-of-Work, and are less energy-intensive.